March 26, 1998
Best Medical Treatment Group, Inc.
45110 Club Drive
Suite B
Indian Wells, California 92210
Re: King Yuen Investment & Development Limited ("the Company")
Dear Sirs,
1. We are duly qualified lawyers of the People's Republic of China (the
"PRC") and are qualified to issue opinions on the laws of the PRC. We
have been requested to issue this opinion on the PRC laws and practice
in connection with the incorporation and interests of the company's
subsidiary, Qin Dynasty Hotel (Xian) Limited (the "Hotel") in the PRC.
2. For the purposes of giving this opinion, we have examined copies of the
documents listed in the Annex hereto. We have also examined such other
documents, conducted such searches and made such inquiries as we have
considered necessary or relevant in order for us to provide this legal
opinion.
3. (1) The Hotel is established by the Company (former name: Far East
Hotels Development Co.) and Xian Hui Tong Enterprises Co.,
Ltd. (Hui Tong) under the laws of the PRC as a Sino-foreign cooperative
joint venture (CJV) enterprise and is a "legal person" with
limited liability.
(2) The Agreement of the Hotel CJV and the Articles of Association of
the Hotel were approved by the Government of the Municipality of Xian
on August 13, 1986. The Hotel registered with the Administrative Bureau
for Industry and Commerce of PRC as a Sino-foreign CJV enterprise and
obtained the business license on November 20, 1986.
(3) All necessary governmental approvals, consents, authorizations and
licenses for existence and operations of the Hotel have been obtained
and are in full force and effect and the Hotel is not in breach of any
conditions or other restrictions of the PRC laws or regulations.
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4. The operations of the Hotel are governed by the CJV Law, the Agreement
of the Hotel CJV and the Articles of Association of the Hotel. Pursuant
to the Agreement of the Hotel CJV approved by the government authority,
the term of the Hotel CJV is for 30 years (November 20, 1986 - November
19, 2016) which term may be extended upon the mutual agreement of the
Company and Hui Tong and approval from the applicable PRC government
authority.
5. (1) The registered capital of the Hotel is US $7,020,000 and the total
amount of investment of the Hotel is US $16,038,818, of which should be
contributed by the Company for the whole amount based on the Agreement
of the Hotel CJV.
(2) According to the verification report issued by Xian Certified
Public Accountant on June 1, 1992, the Company had paid up to the Hotel
in full of US $16,038,818 including the registered capital of US
$7,020,000. The 100% of the rights and interests of the foreign
investor in the Hotel are owned by the Company.
(3) The all investment interests of the Company are protected by the
PRC government.
6. (1) In accordance with the Land Use Agreement reached by Xian
Municipal Land Administration and the Hotel, the Hotel has the
rights to use the ratified Land for the CJV.
(2) The Hotel also has the land use right certificate granted by Xian
Municipal Housing Administration.
(3) All necessary approvals and consents made by the appropriate PRC
government authorities have been obtained for the Hotel to use the
land.
7. (1) The hotel (the real property) was built by using the investment
capital paid by the Company totally.
(2) The Hotel also obtain the real property title certificate granted
by Xian Municipal Housing Administration.
(3) All necessary approvals and consents made by the appropriate PRC
government authorities have been obtained for the Hotel to own the real
property.
8. All interests including profits, equipment and real property interests
and other rights lawfully held by the Company in the Hotel, are
transferable upon the consent of the Hotel CJV parties and the approval
of the appropriate PRC government authority.
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9. This opinion is limited to the matters addressed herein and is not to
be read as an opinion with respect to any other matter.
Yours faithfully,
China Legal Service (H.K.) Ltd.
Bai Tao
Attorney at Law of PRC
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ANNEX
1. The Agreement of the Hotel CJV (June 27, 1986)
2. The Articles of Association of the Hotel (June 27, 1986)
3. The Approval Certificate for the Hotel CJV, issued by Government of
Xian, (August 13, 1986)
4. The Business License of the Hotel, issued by the Administrative Bureau
for Industry and Commerce of PRC, (November 20, 1986)
5. The Verification Report, issued by Xian Certified Public Accountant,
(June 1, 1992)
6. The Land Use Agreement (March 10, 1990)
7. The Land Use Rights Certificate, issued by Xian Municipal Housing
Administration, (December 11, 1996)
8. The Real Property Title Certificate, issued by Xian Municipal Housing
Administration, (January, 1997)
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